15Sep2015

The value of neutrality and allegiance

This article needs to be contextualized within the themes I have been exploring in sports marketing in general and sponsorship in particular. I have recently claimed that in small economic niches, potential sponsored property has a limited value to the company if traditional property / rights holder / company relationships are observed. I also claimed that small to medium size companies may benefit from alternative relations with their potential property and partners.

Today I am going to address apparently opposite strategies in corporate relations with its partners and sponsored property: neutrality and allegiance.

Most small to medium size companies cannot afford a marketing department or an experienced sports marketing professional. Therefore, they are frequently at a loss when it comes to putting their property to use, having little or no knowledge about activation strategies.

Limited to zero resources to hire a marketing professional as staff or consultant frequently coincides with limited resources for distribution. A common scenario is acquired sponsored property being used as sales-person, which basically beats the purpose of acquiring a sponsored property in the first place: as the property is re-converted into staff and acts in sales, the potential to add value to the brand is greatly compromised.

You certainly saw this hundreds of times: the “proudly sponsored athlete” offering a discount code for his sponsor’s product. That’s it: his credibility to add value to the brand was killed by this simple act.

In more professional scenarios where all these roles are played by well defined departments, specialized personnel and where property activation is a main concern, as it involves publicity firms hired by the company, property is kept as far as possible from the sales environment.

Back to the reality of small amateur sports, small to medium size companies that produce items with a well defined consumer population, highly accomplished athletes that will use their sponsorship, at the best, to minimize their competitive expenses, what is the best alternative for companies, high profile players in the field (highly accomplished athletes, coaches, specialists, etc) and potential sponsored property?

There are some bitter facts to be digested here:

The highest return for investment in property for a small or medium size company related to a small, amateur sport is not the athlete, but events. The objective of the company should be to expand its consumer base beyond that sport’s practitioners’. Taking our powerlifting example, a gear manufacturer’s objective should be to sell their wraps, shoes, straps or whatever to gym goers and athletes from other sports. If they depend on the consumer base provided by powerlifting alone, their economic future doesn’t look that good, since that population grows slowly and the number of competitors is increasing at a faster pace because there is an unexplored repressed market demand. If the company produces hardware (racks, bars, etc), that applies even more: they want to sell to all the new facilities experimenting with the “back to basics” styles of training, to schools, to university gyms – basically, to everyone they can. The best property to add value to a brand expanding its consumer base is an event that attracts the attention of the wider public. While an exceptional powerlifting athlete will expose a brands’ new model to more powerlifters, a charitable event will expose the merchandise to a public that had never even known about its existence, and may find use for the products. Moreover, if the company has already established its reputation concerning equipment quality, added value will come from “social responsibility”, “commitment to principles and causes” and good communication with the wider public.

Specialized equipment comes in a huge number of models – many models for each brand. The decision-making process for purchase is based on quality information. Sponsored athletes are not a good source of quality information: no matter how little informed the consumer is, he knows that a sponsored athlete will recommend his sponsor’s brand, by definition. That is biased information. Therefore, this is something in which this property (the sponsored athlete) is not only useless, but potentially harmful to the brand.

Resources for acquiring sponsored property are limited. Trying to optimized it by providing the smallest possible benefit to the sponsored athlete is counter-productive. A couple of pots of whey will not make significant difference in an athlete’s life. For a young, inexperienced athlete, that may play with his self-esteem and pride: after all, if he was chosen to be sponsored, it must mean he’s good. A small sponsorship becomes a “by-proxy award”. That is the reality in many sports and, looking from the outside, there is very little that can be identified as positive to either part. The young inexperienced athlete has little more to offer to the company than his smile with the pot in his arms. No: that doesn’t sell whey. The effectiveness of very sexy models on selling supplements can be easily accessed in a sports fair: the consumer is unable to remember the name of the brand the model was offering. The unfortunate fact is that, at best, the company promoted the model – not their product. In most cases, not even the model: she’s just another nice ass among hundreds of nice asses. Or biceps. When and if the owner of the nice ass or biceps becomes more than just that, then a couple of pots of whey will not be enough to negotiate a sponsorship agreement. Therefore, it should be clear by now that the small sponsorships do not help small to medium size companies (remember: the big companies can buy a thousand nice asses for every nice ass the small company can bargain for). Neither do they help the athlete.

Very high performance athletes from small countries, such as I have been or the athletes from Eastern Europe are, will focus on one thing: cover their competition travel expenses. And that is much more than a couple of pots of whey. It is highly competitive and those who manage to get such sponsorship are the ones who will get to compete. For years, this has been my case.

Now, let’s make a case for the value of neutrality

Recently, though, as my professional situation changed, I migrated to a new relationship format with small to medium size companies. A format that may easily be adopted by many high profile players in the sports and fitness field: the neutral expert.

The neutral expert has a very high value to companies and to consumers. By definition, he is a source of reliable information about products. Therefore, consumers will rely on them in the decision-making process.

This was not exactly a choice, but the result of circumstances: I travel less and extend my period abroad longer, since I do more and more digital based work. That minimized the need for partners who would cover my travel expenses.

One would think that being an expert would be the result of years of studying and the consequent degrees. Nope. It is actually the result of a hobby: I collect gear. Some people collect miniature cars, others collect stamps, I collect wrist wraps, knee wraps, shoes, etc. The aforementioned years of studying did come into play as the collector-me was consulted and – lo and behold – a neutral expert is born.

I do have friends and solid personal relations among manufacturers. That allowed me to observe that I am much more valuable to them as a neutral expert than as a sponsored property. Since the consumer public trusts me on being neutral, when I analyze their needs and suggest they try three different models, from different companies, I am at the same time adding more value to my friend’s brand and increasing the chances of an actual purchase to happen.

Consumer opinion and expert opinion are more and more driving consumer behavior. We needn’t go that far: Angie’s list became an extremely profitable business by monetizing consumer opinion. Most people buying at Amazon will first consider the number of stars under the product and then compare other features.

The more technical the review is, the higher its value. In other words, the consumer becomes the expert.

What does the neutral consumer-turned-expert (or collector-turned-expert or actual academic expert) has to gain from this relationship?

There are indirect gains. That expertise is an asset to organizations who need solid information, such as magazines, news portals or schools. The hobby or passionate interest may become an occupation as this person is paid to provide exempt evaluations and reports. This service is valuable to the market as a whole, pushing companies to develop better products and helping consumers make wiser choices.

What about allegiance?

One of the requirements for sponsored properties, in case of individual athletes/coaches/artists, is that they be spokespersons for the company that hired them. As the company borrows from the properties a set of interesting attributes that will value the brand, such as “success”, “determination”, “victory”, “excellence”, “generosity”, the property will also acquire elements from the brand. This process of approximating sponsored property and company in a harmonious manner for corporate communication implies that the sponsored athlete is able to express that.

The deeper the involvement of the sponsored athlete with the company, the better will be his expression of the brand’s value and its defense.

Consumers and fans can “read” this: an athlete that embraces the company’s mission and defends it through thick and thin performs a double positive action. Allegiance is something highly valued by all audiences. It brings along many higher moral values and if the relationship between sponsored athlete and company encompasses those, the better it is for both. The athlete is seen as a reliable and honorable person. Both attributes “contaminate” the company: a company that builds strong bonds to honorable people must be honorable.

The passionate defense of excellence and faith in one’s partner add to the mix.

Therefore, if the small or medium size company have limited resources for acquiring sponsored property, one should be an event and, if there is only one slot for an athlete, that slot should be filled by the most committed applicant with the best communication skills.

Putting it all together

Small to medium size companies need to make wise choices when it comes to marketing. Most concerns are related to how to manage Social Media Market and rightly so: this is where mistakes can lead to catastrophic losses and wise moves can launch a company into success. But sponsorship and networking with relevant players of the field are a great part of marketing strategy. They also greatly overlap with Social Media Marketing (but no, don’t even think of using your property’s instagram account for your SMM needs: you need to have your own strategy as a company).

On a tight budget, sometimes it is best to invest in events or a non-profit related to the company’s economic niche than in an athlete. At other times, a committed athlete may be a good move.

Keeping good relationship with the “neutral experts”, writers, magazines, seminar and workshop organizers is absolutely essential. That is where a company can actually make use of its quality and gain territory over its competitors with low quality, good-looking products. And I think most of you can come up with at least ten examples of such situations as you read this.